For the third time, Fintech Belgium united fintech’s finest at the Fintech Belgium Summit in Bozar. The summit explored the influence of new trends such as AI, blockchain, e-invoicing and open banking – with its famous APIs – on Belgium’s financial services. How do these trends translate into actual new services and solutions? Which opportunities and challenges do they bring?
Time to take it beyond the hype. Here are three takeaways for this year’s summit:
The data underneath instant payments is what counts
An instant payment is a payment that is settled within 5 seconds, 24/7. In October, the Belgian banks announced the launch of this new service before the end of 2018. Naturally, for a consumer instant payments are a nice – free – treat. But what about B2B? Where is the business value of real-time payments for businesses?
We cannot overlook the dozens of business changes it will require before businesses will be able to reap the benefits. Think about the impact of no longer having a daily cut-off time on cash management and other internal business processes. Moving from working in daily batches of payments to real-time payments will also demand significant reprogramming of software systems and upgrades of connectivity networks.
For B2B, the underlying data of the payment and the way it is processed matters. Additionally, the processing also needs to happen in the correct place of the financial supply chain. Today it is the challenge of transforming business processes – rather than developing features and functions – that pushes the fintech market to develop beyond the hype.
Open banking: “Are we there yet?”
September 2019 is the ultimate deadline for the implementation of PSD2. Banks need to be ready with their technology (APIs) to open up client accounts for Third Party Service Providers (TPPs). TPPs have to comply with the requirements of PSD2 and obtain a license from the National Bank of Belgium or a similar national entity abroad.
Banks have their own legacy struggles and a pile of regulations to comply with. TPPs do not really have much choice today and they sure cannot wait until September 2019 for APIs. Even if these APIs were to be ready earlier, there is no guarantee that this technology will be stable enough to build a service upon. It means that for TPPs, to get started right away, they need to continue to rely on alternative methods to connect to the Belgian banks, such as webscraping or reverse engineering.
Last but not least: banks are not that eager to open-up their customers’ bank accounts to just any TPP. A partner bank told us that trust is a major element in the open banking evolution. A TPP will need to convince the bank that they are secure and trustworthy.
So to answer the question above: we’re not quite there yet.
Yes, blockchain can be GDPR compliant.
It is the combination of one of the biggest tech hypes together with the most disruptive European privacy legislation of 2018. There are some valid debates in the fintech industry and beyond whether or not GDPR and blockchain can live in harmony.
One of our own blockchain experts, Frank Verhaest, was on the panel at the event. We take away from the debate at Fintech Belgium Summit that blockchain can be applied in a GDPR-compliant way. But to be honest, we already knew that. What’s more, the combination can be the foundation for a cross-banks, innovative Know Your Customer (KYC) onboarding process. Frank explains all in a separate blog post on the subject: “How blockchain simplifies client onboarding for banks”.